McDonald’s Management Report
Table of Contents
Unity of Command and Centralization of power. 7
Leadership Theories that could Help in Employee Motivation. 8
Introduction
McDonald’s is a fast-food restaurant chain with franchises in over 120 countries in the globe. It is among the leading fast-food chains with billions of people having received the services at a point of their life. McDonald’s thrives through the various markets and the various competitors due to the strength of the strategies in place (McDonald’s, 2020). The menu is diversified with differences depending on the culture of the market. There is an increased need for healthy eating styles, and the organization has been in the frontline to provide the best food for the customers. This is among the reasons why it thrives.
SWOT Analysis
A company thrives or falls as a result of the strengths, weaknesses, the opportunities and the threats. All these four factors, while properly managed, have a huge impact on the organization. Below is the analysis of the four.
| Strengths a) McDonald’s enjoys a strong organizational culture of quality food and services. b) The company also prides in the uniformity of the products and the menu throughout the world, giving the customers a feeling of loyalty. c) The organization also prides in the established brand name in the entire world. d) Strong supply chain management with the majority of suppliers being independent. e) A wide global network with customers from almost all parts of the world (Gasparro & Jargon, 2012). f) The business model which sees to the franchises making more revenue than company-owned outlets. | Weaknesses a) Some of the foods on the menu are unhealthy. b) The Brand name is declining. c) High employee turnover with claims of low payment. d) The company over relies on franchisees which operate over 90% of its business, e) Overdependence on the western market has caused low market penetration in the other markets in the world. |
| Opportunities a) The company could use digital marketing. b) Utilizing the changing customer demands in innovating the menu. c) There is a huge opportunity in Asian Markets. | Threats a) High Competition from both known brands and informal eateries. b) Stringent government policies in the industry. c) Economic fluctuations |
Ethics
Every company has ethical standards within which it abounds. Ethics refers to the set standards governing the conduct of the individuals or companies and are morally acceptable. One of the ethical steps that the company is trying to have in place is trying to fight for animal rights. The company earlier reported that it would no longer buy eggs from battery caged birds (Robbins, 2010). This will be a milestone as it will help in championing for a free-range system on behalf of the birds. This is ethical since many animal protection movements are championing for such. This could, in turn, increase the number of customers that could not purchase earlier on.
CSR
Corporate social responsibility refers to the steps made by an organization to give back to the community or to appreciate the consumers of the products o=and services and the environment. The company could take into preserving the environment and championing for a cleaner environment. The best strategy is using biodegradable materials and packaging materials while at the same time reducing the emissions (John, 2016). This will, in return, lead to a reduction of wastes and the many hazards to the climate. It could also attract the attention of the customers into environmental conservation and recycling of the packaging materials.
Planning
Planning is the laying down of a future broadcast of how the company should be. The plan of the organization determines the future of the organization. The organization, therefore, is required to create a solid plan
Objectives
McDonald’s corporation should, therefore, set SMART goals for the future. There are increasing demand and increasing Competition each day. The company needs to set objectives on how to deal with the changing demands and customer needs. In a bid to meet the demands of the market and the various customers, the organization should first of all start campaigning for sustainable beef production and purchasing from sources that can only be verified to be sustainable (“McDonald’s Business Model and Strategy: McDonald’s”). The company also seeks to begin purchasing packaging materials made totally from the fibre. To increase the healthiness of their food, the company also shall incorporate fruit salads in their meals all over the world.
Actions
To achieve the above objectives, the organization should make strategic moves. To bring the consumption of genetically modified food and organisms, the organization should create followup teams to ensure that the processes used in production are acceptable. The same should apply to the packaging materials in an attempt to curb the environmental harm.
Resources
The organization seeks to use naturally available resources to provide the best services. The resources owned by a company should as well be used properly to benefit the company and society. The majority of franchisees in the organization use land and McDonald’s property (Lublin & Jargon, 2015). The company believes that investing in real estate is a paying idea and has, therefore made a great investment in the sector. To make the most from this, the company could locate most of the franchisees in their land and save the rent they could pay while at the same time increasing the revenue due to rent payments done to the company.
Implementation
Change cannot happen all of a sudden in such a big corporation. Therefore, the various changes in the organizational makeup and composition should be introduced gradually. To fully combat the purchase of genetically modified organisms, the organization could buy huge unspecified numbers of animals. This will encourage the farmers to keep more and the others to change too. As such, they are introducing the various strategies slowly and gradually is the best way out of the challenges the organization is facing and the plans too.
Organization Culture
Organizational culture plays a very crucial role in its development. Among the most embraced cultures in the organization is employee training. McDonald’s has over the years been training all the employees in all the outlets from their institution. As a result, this has created uniformity in its products and services. The company trains them on how to make the various dishes and how to serve them for the betterment of the organization. This training culture is deeply rooted in the organizational need for uniformity of the products in the various markets. As such, the company can easily maintain customers from all the markets.
Unity of Command and Centralization of power
McDonald’s is among the most centralized organizations in the globe. The main reason behind this centralization of power and command is to maintain a good company reputation. Over the years, the company has kept all the affiliates and franchisees on toes with regards to quality. There is a body set for quality control purposes. This body checks all the franchisees and the affiliates to ensure that the food quality is maintained (Suryavanshi, 2018). Above all that, the company further puts stringent measures to punish those that break the code of conduct and the requirements of the organization. In the pursuit of the unity of command, the recipes and ingredients for various meals are made from the headquarters only. The franchisees are not allowed to alter the requirements and the exact ingredients for whatever the reason. The power bestowed on them to make these changes and any regarding the franchise is very limited, thus achieving a unity of command. The fact that the sole authority comes from the top implies that the organization is centralized. The training program of the organization is also intended for the same purpose of building a unity of command and uniformity of the products and services.
Overall, the centralization of power remains to be the most effective strategy by the organization. As a result, hierarchical organizational structure will serve the organization best. This is because of the interest of the organization. To retain the organizational reputation and the already established brand name is not a walk in the park. There is a dire need for stringent rules governing decision making in the organization. As a result, decisions should be left to the top hierarchical level. If anyone in the organization was allowed to make decisions regarding the various changes and the tastes, then uniformity could be impossible to achieve. However, through a continued centralization of authority, organizational control is quite easy. Customers can get their favourite products from any part of the world without any deviations in the size and taste of the same. This will increase customer loyalty to the brand.
Leadership Theories that could Help in Employee Motivation
Employee motivation is among the main contributors to organizational success. If the employees are not motivated to work, then there are very little chances for the success of the organization. To start with, looking at the traditional leadership theorists, transactional leadership could apply in this case. McDonald’s organization has set rules and quality standards that every member of the organization must abide with. Franchisees are strongly asked to abide by them to protect the organizational reputation and the quality of the products and services. Transactional leadership implies that one gets something in exchange for another thing (Grant, Gino & Hofmann, 2011). In this, the employees or the subjects are motivated by the reward in store for them once they complete a task. The reward could be a job promotion when one performs well or an increase in salary. This could continuously motivate the employees to always work harder and smarter towards the achievement of set organizational goals. Failure to meet the standards is also treated with the same measures. Take, for example, getting sucked if one has a record of poor performance as a tool that could motivate them.
Transformational leadership is yet another theory that explains employee motivation and one that could be used in McDonald’s Case. The theory implies that the leader’s exceptional traits motivate the subjects into performing well. With this in mind, the leader could be the franchisee, motivating the employees or the company-owned outlets motivating the franchises. In both cases, the conduct of the two is a great determinant of the conduct of the juniors or the followers. If the parent organization consistently delivers quality products and services, the juniors or the franchisees shall be more willing to deliver such to meet the standards that have already been set. This kind of motivation does not depend on reward or punishment, but the attributes of the seniors. In transformational leadership modes, the leader is always looking forward to impacting change through leading by example (Hodson & White, 2003). This could help the organization in achieving future sustainability goals towards both the environment and the customers. If the leading outlets stop the use of genetically modified organism, for instance, the franchises and the affiliates in the other markets are also going to adopt the same, especially if it works.
Recommendations
The future of the organization is still bright if they decide to capitalize on the available opportunity. First and foremost, the company needs to shift to the demands of the millennials concerning healthier eating habits. As such, the foods ought to be healthy to avoid issues and complications resulting from the opposite. This can be achieved through incorporation of fruit and vegetable salads in the meals. The company also has more opportunities for growth and development if they choose to navigate the Asian market that has a great population (The McDonald’s of Scotland, 2017). Tapping into that opportunity means higher income in the future.
Conclusion
In conclusion, McDonald’s is an already established brand. Taking advantage of this and the strong leadership that has been offered could help in very great change. The organization emphasizes on the delivery of quality products and services, and they can do anything to achieve that. Moves such as the centralization of power and uniformity of the menu are all strategic, and their impact is inevitable. The quality of their products and services have a great deal to do with the control and chain of command. At such a stage, the organization needs to acutely respond to change to achieve more growth.
References
Grant, A.M., Gino, F., & Hofmann, D.A (2011) Reversing the extraverted leadership advantage: The role of employee proactivity. Academy of Management Journal. 54(3): 528-550.
Hodson, P & White, R (2003) Leadership, Learning, Ambiguity and Uncertainty and their Significance to Dynamic organizations. In: Peterson R, Mannix E, eds. Leading and Managing People in the Dynamic Organization. Hillsdale, NJ: Lawrence Erlbaum.
Gasparro, A & Jargon, J (September 5, 2012). “McDonald’s to Go Vegetarian in India”. The Wall Street Journal. p. B7
John, D (2016) Overview of McDonald’s CSR. Research Methodology.
Lublin, J.S.& Jargon, J (October 15, 2015). “McDonald’s Nears Decision on Real Estate”. Retrieved June 4, 2020.
“McDonald’s Business Model and Strategy: McDonald’s”. corporate.mcdonalds.com. Retrieved June 4, 2020.
McDonald’s (2020) – The Leading Global Food Service Retailer: AboutMcDonalds.com. Retrieved June 4, 2020
Robbins, J (2010) How bad is McDonald’s food. Huffpost
Suryavanshi, S. (2018). Analysis of communication process in McDonald’s. International Journal of Trend in Scientific Research and Development, Volume-2(Issue-5). doi:10.31142/ijtsrd17132
The McDonalds of Scotland. (2017). A Priceless Treasure, 7-12. doi:10.2307/j.ctvpb3x27.7